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I'd suggest thinking of this in terms of a dual income family. If one parent earns $200k, and the other $80k, the amount they'll pay in taxes(fed,state,local) is roughly equivalent to the second income. Add the cost of a sitter, commute, and you'll likely have one parent forgoing their work to stay at home with the kids. The government is left with about $25k less in taxes. A babysitter is without a job, home improvements are shelved, the purchase of durable good delayed... etc., etc., etc.
The bad trickles down, as does the good.
Feb 12, 2008, 4:46:00 PM
Posted to Marginal Taxes on the Poor